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Digest of the Week – Technological Neutrality

Digest of the Week – Technological Neutrality

Technological neutrality applies to the valuation of a reproduction licence.

Canadian Broadcasting Corp. v. SODRAC 2003 Inc.
2015 CarswellNat 6092
Supreme Court of Canada

Intellectual property --- Copyright — Licences — General principles

CBC, as Canada's public broadcaster, was both producer and broadcaster of television programs — SODRAC was collective society organized to manage reproduction rights of its members, which focused on French-language music reproduction rights — SODRAC asked producers to pay for synchronization licences, which were structured to permit producers to make synchronization copies, but expressly barred producers from authorizing further downstream copying by broadcaster — Dispute arose between CBC and SODRAC about whether royalties were payable for ephemeral copies of works made in course of production or broadcasting activities — In 2012, pursuant to s.70(2) of Copyright Act, Copyright Board set terms of licence between CBC and SODRAC, holding that CBC's broadcast-incidental copying activity engaged reproduction right, that licence for such copies could not be implied from synchronization licences covering production process, and that CBC required separate reproduction licence to legitimize its broadcast-incidental copying — Board issued licence authorizing CBC to reproduce works in SODRAC repertoire, and later issued interim licence to take effect after expiry of 2008-2012 licence that extended terms of that licence — Federal Court of Appeal upheld both licences — CBC appealed — Appeal allowed; licence decisions were remitted to board for reconsideration — Board erred in failing to consider principles of technological neutrality and balance in valuing licence fees for CBC's television and internet broadcast-incidental copies — Board's valuation did not give any indication that principles of technological neutrality and balance were considered as board did not compare value contributed by copyright protected reproductions in old and new technology — Board also failed to take into account contributions made by use of copyright protected works and risk and investment by user in its new technology, as required by balance principle — Board was correct in finding that broadcast-incidental copying engages reproduction right — Board was correct in finding that licence to make broadcast-incidental copies should not be implied from synchronization licences issued by SODRAC.
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